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Author: Upasana Singh (Founder & CEO, Accords International)
The introduction of instant grocery delivery apps like SoftBank-backed Swiggy Instamart, Mumbai-based Zepto, Reliance-backed Dunzo, Zomato-owned Blinkit, and Tata Group-owned BBNow has significantly increased the dependence of urban households in India on online shopping for their frequent top-up purchases between their fortnightly bulk-shopping. Even though approximately two-thirds of India's 1.3 billion people live in rural areas, shoppers in megacities have significant spending capacity. According to a report by Redseer, India’s quick commerce market witnessed 15X growth in just 3 years and has reached a market size of close to $ 5.5 billion. However, this growth has also brought about challenges, such as issues with service availability and reliability.
Recently, many shoppers in Delhi and Near Capital Region (NCR) have been facing difficulties in ordering groceries and household supplies from Zomato-owned Blinkit, as the service has been temporarily unavailable. Since April 15, around 50 Blinkit dark stores[1] are shut as bike riders have stopped working, demanding better wages. This shutdown is in response to the changes made by Zomato in the pay structure. As per the revised pay scale of Blinkit delivery executives, they will receive ₹15 per delivery instead of ₹25 per delivery within 1 km. According to some of the delivery executives, they were paid ₹50 per order when Blinkit was still Grofers. Some workers said that after the implementation of the new payout structure, their daily income will be slashed by 40-50 percent.
This issue highlights the macroeconomic policy concerns associated with the rapidly expanding gig economy in India. The delivery partners working with tech-based instant grocery delivery companies come under this ambit. These freelancers are a very important part of the rapidly growing Indian Gig Economy. A 2022 Study[2] released by the Indian Public Policy think tank, NITI
Ayog estimates that the gig workforce is expected to expand to 2.35 crore (23.5 million) workers by 2029-30. Similarly, in another study where the authors used GTAPv10 database to evaluate the impact of productivity shock on the Indian economy. It observed that the demand for labor in most of the sectors will decline, and due to this India’s gig economy might experience a potential boost.[3]
Gig economy workers in India often face uncertain working conditions, including irregular incomes, lack of job security, and limited access to benefits such as health insurance and paid leave. The Code on Social Security, 2020[4] which defines ‘gig workers’ as a person who performs work or participates in a work arrangement and earns from such activities outside of the traditional employer-employee relationship still awaits implementation. According to the Fairwork India Ratings 2022[5] Urban Company ranks highest with seven points on their scoresheet based on 5 fair work principles (Fair pay, Fair Conditions, Fair Contracts, Fair Management, and Fair Representation) while Zomato scored four and Uber, Ola, Dunzo, PharmEasy scored Zero. The Indian Federation of App-Based Transport Workers has filed a petition in the Supreme Court of India in September 2020 asking to be recognized as ‘unorganised workers’. Presently the contract between hiring companies and gig workers identifies them as consultants, partners, agents, and/or executives but not employees, depriving them of the benefits of the social security legislation.
The gig economy is in dire need of reform and improvement, particularly in India. To achieve this, several key steps can be taken. Firstly, the government should promptly validate and enforce existing labor laws that are applicable to gig workers. Secondly, the definition of employee and employer should be expanded to explicitly include gig workers and the companies that hire them, respectively. This would ensure that gig workers are afforded the same rights and protections as traditional employees and that their employers are responsible for their social security.
Alternatively, if gig workers are not included in the definition of employee, their rights should still be safeguarded by allowing them to form unions, demand universal minimum salary, health and workplace protections, and occupational safety. Furthermore, conflicts and disputes are inevitable in any labor relations system, and therefore, it is crucial to establish a comprehensive system for prevention and settlement of labor disputes. In addition to the mention of tribunals and insurance courts in the labor code, incorporating alternative dispute resolution methods such as mediation or conciliation could significantly enhance the effectiveness of labor relations policy.
It is worth noting that many countries have successfully utilized conciliation and mediation procedures as the default option for state dispute settlement. These measures would contribute to a more equitable and just gig economy, where the rights and well-being of gig workers are prioritized, and disputes are effectively managed through fair and efficient mechanisms.
[1] A dark store/kitchen is a grocery store which works as a mini warehouse in the cities for grocery delivery apps. Generally packed from floor to ceilings with groceries and other daily need items these stores are exact copies of the 12 million traditionally run ‘Kirana’ stores all over India.
[2] NITI Aayog. (2022). India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work. June, 2022.
(available at https://www.niti.gov.in/sites/default/files/2022-06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf)
[3] Isha Jaswal & Upasana Singh, 2022. "Can Labour Productivity Impact India’s Gig Economy?," Springer Books, in: Ashish Gupta & Tavishi Tewary & Badri Narayanan Gopalakrishnan (ed.), Sustainability in the Gig Economy, pages 127-136, Springer.
[5] https://fair.work/wp-content/uploads/sites/17/2022/12/221223_fairwork_india-report-2022_RZ_red_edits_10.pdf